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Dow Theory Trend Monitor

Thursday, February 7, 2013

Dow Theory Update for Feb 7: Inconclusive day with no change in trends

Precious
metals continue aimless.

I am
finishing a new post for this Dow Theory blog, which will continue the series I
started with my post “How often does the Dow Theory outperform buy and hold?” In the next issue, I will focus on the secular
1966-1981 bear market. I will look under the magnifier the way the Dow Theory
behaved under such a terrible bear market. The conclusions are truly
encouraging and prove that the Dow Theory really provides the investor with an
edge.

Today was an indecisive day. The SPY and Industrials closed down. The Transports
closed up. The primary and secondary trend of the market remains bullish.

Today’s volume was lower than yesterday’s. Since, albeit mildly, it was a
down day, contracting volume has a bullish implication. I’d
label the overall pattern of volume as neutral.

GDX closed up, and SIL closed down. The primary trend and secondary trend
remain bearish. I specially dislike that all the price action is occurring below
the level that defined the primary bear market signal. The fact that these two
ETFs are unable to even rally for some time above prior relevant lows shows
that distribution is more likely than accumulation right now. Here you have an
updated chart.

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This blog (dowtheoryinvestment.com) is strictly a personal journal applying my interpretation of Dow Theory principles to the action of the stock market and my musings about investment and trading in general. This blog is intended solely for entertaining, illustrative or informational purposes. I am not a registered investment advisor and neither the information nor the opinions expressed should be construed as a solicitation to buy or sell any stock, option, ETF, mutual fund, currency, commodity, or any other security. I am unaware of any readers personal circumstance, financial condition, risk tolerance or goals and objectives, so nothing read here should be considered advice suitable for them. Anyone reading this blog does so with the understanding that this is strictly meant as an analytical exercise and does not proffer actionable advice in any way, shape or form. Trading and investing always entail risk and possible loss of funds and should only be undertaken after appropriate due diligence by the trader/investor and after consulting a registered investment adviser.